China IP LawyersA few days ago the invaluable China Film Insider ran a piece about how American cable powerhouse Home Box Office is trying to stop the Wuxi, China-based HBO Studio Restaurant & Bar from using the HBO name without permission. But this movie-themed restaurant has every right to its name. As of 2013, it has owned a trademark registration for “HBO” in Class 43 for restaurant services.

HBO is perhaps emboldened by the recent, well-publicized victories of Donald Trump and Michael Jordan, who triumphed after years attempting to wrest “their” trademarks away from trademark squatters. Or by the judicial interpretation released by the Supreme People’s Court last month describing how China was going to take a stricter stance against trademark squatters.

But even if the Trump and Jordan decisions are harbingers of a new trend in protecting well-known marks, brand owners like HBO need to understand the limits of such rulings. Michael Jordan and Donald Trump only won partial victories. The trademark squatters’ rights were only invalidated with respect to those products or services for which Jordan and Trump were already famous. For Jordan: sporting goods. For Trump: construction services. Notably, the decision by the Trademark Review and Adjudication Board (TRAB) that paved the way for Trump to register “TRUMP” for construction services left intact the trademark squatter’s right to use “TRUMP” for mining and drilling services. Because, presumably, Trump was unable to show that “TRUMP” was well-known for those services.

In the HBO Studio Restaurant matter, Home Box Office faces two big problems. First of all, HBO is not well-known in China in ANY context. Until 2014, when HBO signed a streaming deal with Tencent, the only place you could legally watch HBO in China was in high-end hotels that catered to foreigners. And HBO’s brand awareness in China hasn’t exactly taken off since then. A few months ago, Chinese actor Cao Jun, the star of the HBO Asia original production “Master of the Drunken Fist: Beggar So,” admitted to knowing very little about HBO. Frankly, HBO would have difficulty invalidating ANY trademark on the basis of being a well-known mark in China. But in this case, they have to climb an even steeper hill. They need to prove that the “HBO” name is well-known with respect to restaurant services. And that is almost certainly not going to happen. In the alternative, HBO could argue that the Wuxi restaurant’s trademark was filed in bad faith, but China has been unwilling to invalidate trademarks on this basis except in the case of marks filed by serial trademark squatters and former business partners.

Don’t get me wrong: this restaurant has shamelessly coopted the HBO name in their entertainment-themed Western restaurant, and the restaurant owner’s complaints on its Weibo account about being bullied for no reason by a big American company have the air of protesting too much. But HBO’s strategy is almost certain to fail, because the Wuxi restaurant has superior rights under Chinese trademark law.

It appears HBO has already been down this road before; they had filed an application on March 28, 2014 to cover Class 43 services (including restaurant services), but were rejected for everything but renting cooking equipment, renting drinking fountains, and renting non-theater, non-tv studios. The basis for the rejection is not publicly available, but it is almost certainly because the Wuxi restaurant had filed its trademark application first. I note that on June 6, 2016, HBO filed a new application for Class 43 services, apparently hoping for a different outcome on their second try. I wish them well, but am going to assume that they have a Plan B.

HBO’s better strategy would have been to quietly approach this restaurant and offer to buy the trademark. Maybe HBO already tried that and failed.

I took a quick look and there are dozens of registrations for “HBO” in China, covering all manner of goods and services. And most of them aren’t owned by Home Box Office. That’s a lot of invalidations and appeals to file. Good news for China IP lawyers, but not good news for HBO. Although HBO can take heart from one thing: HBO Studio Restaurant & Bar has a high rating on Dianping, the Chinese version of Yelp.

To reiterate: the recent trend in Chinese trademark jurisprudence to protect well-known marks is heartening, but only extends to those goods or services for which brands are already well-known. If you want to protect your mark for other goods and services, you need to file in a broader range of classes before anyone else.

China media and entertainment lawOur Beijing-based entertainment attorney, Mathew Alderson, will be speaking on a panel at Southwestern Law School in Los Angeles on January 19th. The panel is entitled “China and Hollywood: Distribution and Censorship in a Cross-Pacific Partnership“.

Mathew’s panel is part of the Southwestern Law School’s 14th Annual Media Law Conference, whose theme this year is: Keeping the Beat in a Crazy Year: Blurred Lines and Border Crossings.

Mathew’s panel will focus on how to work within China’s legal system on new productions and on how to deal with the unique challenges China presents when doing productions there. The event will be moderated by Covington’s Nicholas Francescon. The other panelists will be J. Martin Willhite, General Counsel and COO of Legendary Pictures, and Sheri Jeffrey from Hogan Lovells. The Conference is presented by the Biederman Entertainment and Media Law Institute and the Media Law Resource Centre.

If you are interested in China media and entertainment law or media and entertainment law generally (particularly IP law), you should go. The conference runs from 1 pm until 7 pm, with the post-event reception scheduled to last until 8 p.m. Go to this link to register.

We hope to see you there.

China Attorneys

Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a super fast general answer and, when it is easy to do so, a link or two to a blog post that may provide some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

We are often asked questions along the lines of “Where can I go to find out more about ________” When this question relates to Chinese law, we are rarely able to help because our China attorneys do their legal research in Chinese. And when the question is about something other than Chinese law, our China attorneys are rarely able to help because, well, we focus on Chinese law.

But earlier this week I received an email from one of our movie clients asking me if I was aware of where she might be able to find good writings on China’s movie and entertainment industry and, shockingly enough, I was because earlier in the week I had been reading Bridging the Dragon’s website. “Bridging the Dragon is an association connecting European and Chinese film industries” and its website maintains the following really sweet list and amazingly comprehensive list of “Useful Links” relevant to the China movie and entertainment industry:

Asia TV Forum & Market

Asian Film Market

Asian Movie Pulse

Beijing International Film Festival

Box Office Mojo China

China Film Biz

China Film Co-Production Corporation

China Film Insider

The CFI Guide to Film Production in China

China Law Blog — Hey, that’s us!

Chinese Films

Chinese Literature in Translation – Paper Republic

Entgroup

Film Business Asia

HKIFF Society

Hong Kong – Asia Film Financing Forum

SAPPRFT

Screen Asia

Shanghai International Film Festival

Young’s China Business Blog

I am not aware of any China relevant movie/entertainment sites missing from this list, but if you are, please let us all know in a comment below.

China entertainment lawyerChina’s long-awaited Film Promotion Law was enacted by the Standing Committee of the PRC National People’s Congress on November 7, 2016 and is set to take effect on March 1, 2017. We last wrote about the Film Promotion Law when China’s National People’s Congress issued a draft for public comment in November 2015. The newly enacted Law does not differ markedly from the earlier draft. Below is a list of the main differences by reference to Article numbering:

1. Purpose — In addition to promoting the film industry, the purpose of the Law has been broadened to include promoting socialist core values and regulating film market “order”.

2. Streaming — Existing laws applicable to streaming of motion pictures on the Internet, telecommunication networks and radio networks will continue to apply.

5. National development plans — The State Council is to incorporate the development of the film industry into national economic and social development plans.

9. “Socialist core values” for cast & crew — Actors, directors and other professionals in the film industry must not only possess high artistic skill but also abide by socialist core values, social moral standards and professional ethics codes, comply with the law and build an excellent social image.

14. Confirmation of national treatment for official co-pros — This is a reiteration of the existing policy that co-productions meeting the ratio requirements with respect to creation, funding, profit distribution will be treated as motion pictures produced by domestic PRC legal entities.

15. Motion picture production license requirement deleted — Originally, a “film production license” requirement was imposed. Enterprises or organizations that had the appropriate personnel, funds and other resources were expressly entitled to engage in film production activities provided they received approval from the relevant film authorities at the provincial level.

18. Panel of “experts” — Reviews for production and exhibition approval will involve at least five experts. The draft Law did not specify the number of experts. A definition of “expert” is not provided. Experts will be selected from an “expert pool,” having regard to a picture’s theme. Specific measures on expert selection are to be promulgated by the relevant department of the State Council.

19. Second review process — If a picture’s content needs to be changed after a public release license has been obtained the film must go through a second review process. The draft Law provided that a public release license was to have been obtained after the second review process but the new Law deleted this requirement.

22. “Hurtful” or “harmful” business activities banned — Citizens, legal persons, and other organizations may undertake business activities that include the printing, processing, post-production of foreign films and must file with the relevant film administration department at the provincial level. What must be “filed” is not specified. Any business activities in connection with foreign films that contain content that could hurt PRC national dignity, honor and interests, social stability or ethnic unity will not be allowed.

29. “Reasonable arrangement” of screening times — In addition to making sure the total length of films produced by domestic legal persons/organizations is no less than 2/3 of the total length of all of the films released in a given year, movie theaters must also “reasonably arrange” the times and screenings when such films are being released.

31. In-theater anti-piracy — When theater personnel find someone is illegally recording a film, not only can they stop such behavior (as in the draft Law) they can also demand that such content be deleted and can ask those to leave immediately if they refuse to obey.

37. Stronger audit powers — The government is to “strengthen” audits of the use of funds in the film industry.

All up, the law is apparently intended to simplify the regulation of screenplays, film productions and exhibitions and the holding of foreign-related film festivals. There are no fundamental changes to the existing regulatory framework as it affects foreigners. Foreigners will still be prevented from engaging independently in film production in China. Foreigners will still be prevented from engaging in film distribution in China. No mention is made of any lifting of the quota on importing foreign films on a revenue-sharing basis. Still, many of the changes should streamline the official co-production process for foreign producers. There is also now express official recognition of the need for improvements in the system of film finance and the need for tax incentives for local producers.

China copyrightCopyright is an essential part of any substantive IP protection plan in China, but many companies fail to take an extremely important step: registering their copyrights in China. One of the most common misconceptions our China lawyers frequently hear is that copyright registration in China is optional, because you do not have to file anything to have a valid copyright in China.

Like so many China misconceptions, this one has an element of truth to it. As a signatory to the Berne Convention, China has the same basic definition of what is protected under copyright as the 171 other Convention parties: an original creative work that exists in a fixed medium. A “creative work” could be anything from a video game, song, or toy to a database, map, or product design. A songwriter in Nashville, a programmer in Auckland, a furniture designer in Helsinki: all of their creative works are protected by copyright at the time they complete the work in question, and that copyright is just as valid in China as it is in the U.S., New Zealand, and Finland. But there’s a big difference between having a valid copyright in China and having an enforceable copyright in China.

In most situations, the key issue is one of proof. A copyright registration in China is presumptive evidence of ownership, and in some situations it’s the only evidence that is acceptable. Whether you’re trying to take down an infringing video on Youku Tudou or an infringing photograph of your product on Alibaba, have counterfeit dolls seized at Customs, or sue a publisher who is selling your book without permission, a certificate issued by the Copyright Protection Centre of China (CPCC) is the easiest and most efficient way to enforce your rights. And copyright registration is almost always a prerequisite to getting royalty payments from Chinese entities that have licensed copyrighted material.

Meanwhile, if you are trying to prove ownership of a creative work and you don’t have a Chinese copyright registration, it could take weeks or even months – and that assumes a clear, well-documented chain of title. If you’re at the point where you need to enforce a copyright to stop infringement, it’s almost certainly going to be time-sensitive.

China’s copyright registration process is fairly straightforward, and it does not involve substantive examination at the time of registration, but it usually takes a couple months to receive a copyright certificate. In our experience, when our clients have China copyright certificates we usually secure takedowns of infringing materials relatively quickly and easily. But without a copyright certificate, takedowns take considerably longer and sometimes they do not happen at all.

Don’t get caught flat-footed. If you have copyrightable IP that you want to protect in China, register it with the CPCC. Now.

China AttorneysBecause of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a super fast general answer and, when it is easy to do so, a link or two to a blog post that may provide some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

Our China attorneys are often asked some version of the following question:

I’m making a low-budget independent movie set in China. Can I just take my cast and crew to Xi’an on tourist visas and film a movie without bothering with permits?

Our answer:

It is illegal for foreigners to engage in film production in China by themselves. Full stop. Guerrilla filmmaking may have a certain romantic appeal, but things get a lot less romantic when viewed through the bars of a prison cell. Or when you lose all your footage and equipment and have to pay a substantial fine. Maybe you’ll get away with it, but is it really worth putting you, your cast, and your crew in harm’s way? Independent films may be inherently risky, but that’s because most of them lose money, not because making the movie is dangerous. Unless you’re making a movie with Werner Herzog in the Amazon. (When Klaus Kinski is in the mix, all bets are off.)

Note also that although changes have been proposed to the laws and regulations governing film production in China, those changes will not change anything about foreigners seeking to film in China.

China IPPreviously on China Law Blog…

In Part 1 of this three-part series, we discussed the background of the Talpa-Canxing dispute over The Voice of China. Now we’ll see what happened after Canxing broke Talpa’s heart.

Undeterred by Talpa finding a new licensee, Canxing announced that it would keep producing a singing show. The format would be different, Canxing claimed, but the name would be virtually the same: The Voice of China 2016 and 2016中国好声音. Because – surprise! – Canxing’s distribution partner Zhejiang Television was the registered owner of the 中国好声音 trademark.

Talpa sought a preliminary arbitral award in Hong Kong against STAR Group Limited, Canxing’s Hong Kong affiliate. But the Hong Kong International Arbitration Centre (HKIAC) denied Talpa’s request (at least insofar as it pertained to the Chinese name) because Talpa had no rights to the Chinese name. Did we mention that Talpa should have registered the Chinese-language trademark?

More or less at the same time, Tangde filed suit in a Beijing IP court against Canxing, claiming trademark infringement and unfair competition, and seeking a preliminary injunction. To the surprise of some, on June 20, 2016 the Beijing court ruled in Tangde’s favor insofar as the name of the program, holding that Canxing could not call its program either The Voice of China or 中国好声音. Canxing appealed the ruling, but changed the English name to “Sing! China.” On appeal, Canxing lost again, and complied with the ruling by changing the Chinese name of the show to中国新歌声, which roughly translates as China’s New Singing Voice.

Around June 13, 2016, while all of these legal proceedings were ongoing, SAPPRFT issued a directive curtailing the airing of television programs based on foreign formats. The directive clarified that programs produced in a foreign country (like The Big Bang Theory) and programs based on a foreign format (like The Voice of China) would both be considered foreign content, and that television channels (1) would have to secure prior government approval to air such programs, (2) could only show two foreign content programs during prime time each year, and (3) could only show one new foreign content program each year, and not during prime time in the first year.

On July 15, 2016, the first season of 中国新歌声 began on Zhejiang Television. It had the same judges as last year’s season of中国好声音 and an almost indistinguishable format. As of this writing, the season is about half over, and the main difference appears to be that during the blind audition phase, instead of swiveling 180 degrees, the judges’ chairs slide down a long ramp. Everyone I know who watches the show (including my entire family) agrees it is virtually the same show. And it seems to be as popular as ever, both with the viewing audience and with the sponsors.

The coverage to date has focused on this story as a contract, copyright, and trademark dispute. That’s true enough, and as far as that goes it’s not a particularly noteworthy dispute by Hollywood standards. Indeed, the fact that this dispute is the subject of multiple legal proceedings could even be seen as a sign of China’s maturity as a media market. Twenty years ago, if a Chinese production company copied an American or European television program, no one in the West would have cared (much), because (1) the rights owner would not have had a plausible remedy in China, (2) the Chinese company never would have paid for the rights, and (3) even if it had paid, the amount paid would have been a pittance.

But there’s another story here. By making a few superficial changes to the show and changing the name, Canxing and Zhejiang Television are trying to skirt the restrictions on foreign content. According to them,中国新歌声 is a 100% Chinese content show. Canxing has also stated that it won’t purchase any more foreign formats in the future.

If Canxing and Zhejiang can get away with such copyright infringement — and thus far they have – this becomes a cautionary tale for foreign content owners licensing to China. Chinese companies may still see value in licensing foreign formats, because just copying a show isn’t as easy it looks. Indeed, that’s why Canxing and other Chinese production companies have been paying serious money for the most popular formats. But once they have received the production bible and produced a season or two, what incentive do they have to keep paying a license fee, if they can make a couple changes and call the show 100% Chinese?

It will be interesting to see how (or if) Canxing and Zhejiang Television are held accountable for 中国新歌声. Licensors of content have to look at this case and think seriously about frontloading any payments. They might not get a second bite.

Stay tuned for the thrilling conclusion, where I’ll discuss how content owners can better protect themselves when licensing to China to avoid the sort of trainwreck Talpa appears headed for.

China IPA strange and fascinating story is unfolding right now in the world of Chinese reality television programming. One of the most popular shows in China, The Voice of China, is embroiled in legal controversy, and the outcome could affect every single content license in China. Okay, that might be a bit of hyperbole, but still, this is one episode you won’t want to miss.

The story begins back in 2012, when Shanghai Canxing Culture & Broadcast Co. (上海灿星文化传播有限公司) licensed the format for The Voice from Dutch media entity Talpa. Talpa had originated the format back in 2010 with The Voice of Holland and has since licensed the hugely popular singing competition to more than 60 countries, including the U.S. where it is simply known as The Voice.

The Voice of China began airing in July 2012 on Zhejiang Television, and quickly became one of the most popular television shows in China. Though the English name followed the usual naming convention, the Chinese name of the show was 中国好声音, which translates, more or less, as “China’s Best Voice.”

Guess who didn’t register the Chinese name of the show? That would be Talpa. It’s depressing how often we have to repeat this: please, please, please register both your English-language trademark AND the Chinese version. By now, any company that gets caught flat-footed on this issue only has themselves (or their IP counsel) to blame.

Meanwhile, starting in 2012, the Chinese government agency overseeing media and censorship (currently known as SAPPRFT, for State Administration of Press, Publication, Radio, Film and Television), which had always restricted foreign content in China, began to announce even more directives regulating foreign film and television content, including specific limitations on when and how often foreign content shows could air on television and on streaming sites, and even specific limitations on singing competition programs. News stories and commentary about these directives often singled out The Voice as a possible target, but Zhejiang vowed that the show would remain on the air, and so it did — and continued to be a ratings powerhouse.

In early 2016, license renewal talks broke down between Canxing and Talpa. According to Canxing, Talpa asked for an exorbitant royalty percentage and also tried to get Canxing to take a package of shows when all Canxing really wanted was The Voice. This latter negotiating ploy, if true, is hardly unique to this situation; the dismal choice faced by Canxing is familiar to anyone who’s been a cable subscriber.

After Canxing ended the talks unilaterally, Talpa quickly licensed the format to another Zhejiang-based Chinese production company, Zhejiang Tangde Film & TV Co., Ltd. (浙江唐德影视股份有限公司), and Talpa and Tangde announced plans to produce seasons 5-8 of The Voice of China.

You think this story’s over but it’s ready to begin. Tune in the day after tomorrow for part two.

China entertainment lawProtection of IP is an ongoing concern for foreign businesses with projects or investments in the entertainment business in China. Many foreigners mistakenly believe their intellectual property cannot be protected at all in China so they overlook or disregard the protections available to them under Chinese law. In response to these concerns and beliefs, the UK Government, the British Film Institute and the Producers Alliance for Cinema & Television (PACT) recently collaborated to prepare a new UK-China Film & TV Toolkit.

The Toolkit includes a template, special-purpose non-disclosure agreement for use by UK film and TV businesses when dealing with their Chinese partners. Also included are detailed explanatory notes guiding UK businesses on the applicable principles of confidentiality, copyright and trademarks under PRC law. The template NDA forming part of the Toolkit was prepared according to PRC law and practice and is bilingual. It is hoped that the Toolkit will allow its users to avoid common pitfalls, including those arising from inappropriate choices of law and jurisdiction.

In liaison with Tom Duke, the UK’s Intellectual Property Attaché to China, our China entertainment law team represented the UK Government, the BFI and PACT on the project and prepared the NDA and the explanatory notes making up the Toolkit.

Intended users of the Toolkit include creative companies, producers, sales companies, VFX houses, and service providers such as film studios and consultants operating in the UK film or TV industries. The Toolkit is intended to assist these businesses to protect themselves when they disclose creative materials or commercial information, especially during the initial phase of negotiations during which an appropriate deal structure needs to be worked out. In general the Toolkit will encourage creative collaboration and openness in business dealings.

Among other things, the Toolkit covers the following:

  • How China’s confidentiality and trade secret laws differ from those of common law jurisdictions such as the US and the UK
  • The basic requirements for protecting trade secrets in China
  • The limits to protection and how protection can be lost
  • Why contracts with Chinese parties should always be bilingual
  • Why Chinese law and jurisdiction should be chosen in most instances
  • How protection under an NDA should be supplemented by trademark and copyright registrations in China

Baroness Neville-Rolfe, the UK’s Minister of State for Energy and Intellectual Property, has been visiting  China this week. The visit program has included high level bilateral meetings, policy exchanges and external stakeholder events. The visit will culminate in The UK-China IP Symposium in Beijing on Friday August 26th. The Symposium marks the 20th year of UK Intellectual Property Office cooperation with China’s State Intellectual Property Office (SIPO). As the flagship UK-China IP event, the Symposium will be co-hosted by Commissioner Shen Changyu of SIPO and Baroness Neville-Rolfe.

The Toolkit will be launched officially at the Symposium. I will introduce the Toolkit in a special session of the Symposium and explain how it will help protect intellectual property and encourage creative collaboration. There will also be sessions on promoting innovation through patents and designs and on the UK’s IP enforcement strategy to 2020. To reserve a place at the Symposium please contact Shi.Hui@fco.gov.uk.

For further information about the Toolkit please contact the BFI or PACT.

Netflix in ChinaLast Friday, Alibaba felt the need to formally dispel market rumors that it would be investing in Netflix. Such “nothing to see here” announcements are almost as common on the business pages as in the sports pages, and I draw no conclusions about what the two companies may have been planning.

But it did get me thinking about Netflix and China. I see Netflix as a fantastically innovative company that, like Amazon, continually (and usually correctly) anticipates where the market is going. It’s sometimes hard to remember that Netflix began as an upstart rival to Blockbuster Video and that Blockbuster could have purchased Netflix for $50 million in 2000.

Netflix has not entered the Chinese market, though, and unless it changes its business strategy or China changes its approach to regulating content and Internet streaming, it probably  will not be doing so soon. A January piece in Wired suggested that if Netflix were willing to spend billions and make concessions to the Chinese government, it might be allowed in, but this misses the point. China is getting more restrictive regarding internet content, not less, and it is simply not possible for a foreign-owned company to do in China what Netflix does in the rest of the world.

The Chinese government has made clear that longstanding rules prohibiting foreign control of online publishing (including streaming) will be broadly interpreted and strictly enforced. Apple’s iTunes Movies and iBooks Store and a premium Disney streaming channel were yanked offline in April, with no return in sight. And you can find any number of stories about China clamping down on foreign content. As of July 1, China imposed strict regulations on the number of foreign-inspired reality shows on the air. Over the past couple years, scripted television programs ranging from NCIS to The Good Wife to The Big Bang Theory have been taken offline with the flimsiest of rationales. (If you are ever stuck for a conversation topic with a Chinese person under the age of 30, start talking about The Big Bang Theory. It has replaced Friends as the show that every college student in China has seen multiple times and uses as a cultural touchstone for understanding America.) And we haven’t even gotten to the new television censorship rules that forbid depictions of (among other things) drinking, smoking, adultery, violence, homosexuality, and the occult.

The only way I can see Netflix entering the Chinese market is with a Chinese partner that takes on full responsibility for the content and the delivery of such content. Which is not much different than just finding a Chinese distributor, as Netflix already does with its original programs like House of Cards. 

Netflix can take solace in one thing, however; China’s new rules on foreign television programs require that the government review an entire season before a single episode can be shown online. Looks like everyone’s getting on the bingewatching bandwagon.